GBP/USD: the plan for the US session on January 17 (analysis of morning deals).

You require the following to open long positions on the GBP/USD:

Only one indication to enter the market was produced in the morning. Let's analyze the 5-minute chart to see what transpired there. On hearing that UK salaries were rising, a false breakdown developed and grew, eventually leading to a false breakdown in the area of 1.2220, from which a strong sell signal could be obtained. The pressure on the pound diminished following a correction of 25 points down, although it did not result in a sharp downward movement. I made a comprehensive revision to the technical image in the afternoon.

There are no significant US statistics in the afternoon, and the only speech that might exert pressure on the pair is that of John Williams, a representative of the Federal Reserve System, and even that seems improbable. I'm awaiting the removal of stop orders above 1.2220 and movement to 1.2245 because of this. The best-case scenario for purchasing would be a decrease in the pound's value to the new support level of 1.2194, where a false collapse would provide a great entry point with an eye toward a breakout above 1.2245. But the breakthrough of 1.2245 with a top-down test is much more significant because it will allow for the potential of going back to the monthly maximum and updating 1.2299, where I will fix the profit. Even though the level of 1.2350 will be further away, we won't be able to quickly attain it without significant political or structural reforms. If the bulls are unable to complete the objectives and miss 1.2194, I anticipate the emergence of a more potent downward correction and a test of 1.2146 as a new low. This is the reason I suggest opening long positions there on a false breakdown rather than rushing into buying. To recover from 1.2093 and correct 30-35 points within a day, I will buy GBP/USD right away.

You require the following to open short trades on the GBP/USD:

As a result of a revision to the closest resistance level, I am now concentrating on resistance at 1.2245, which the pound will undoubtedly break today - at the very least to trigger stop orders from sellers who opened positions below 1.2220 in the morning. For this reason, I believe that the best scenario for selling after the data on the Empire Manufacturing index is the development of a false breakdown in the vicinity of 1.2245. The bears' intended goal in this scenario will be the 1.2194 support level, which was created by the day's opening results. The only thing that will put more pressure on the pound and provide an entry opportunity to sell with a rise to 1.2146 and the potential of updating 1.2093, where I will fix the profit, is a breakout and a reversal test from the bottom up of this range. The area of 1.2008 will be the farthest destination. Buyers of the pound will feel the strength again with the possibility of GBP/USD growth and the absence of bears around 1.2245, and from there should be rather active sales following a false breakdown, which may result in an update of the monthly maximum. In this instance, the only entry point into short positions with the intention of a new downward movement is a false breakout in the vicinity of the next resistance level of 1.2299. If there is no activity there, I will sell GBP/USD right away at the highest price of 1.2350, but only if I believe the pair will decline by 30-35 points within a day.

There was a substantial decline in long positions and a sharp increase in short positions in the COT report (Commitment of Traders) for January 10. But you should be aware that this analysis does not account for the US inflation statistics that were released last Thursday and had a considerable impact on the balance of power. As a result, the situation, in reality, may have changed dramatically since then. The demand for risky assets, including the British pound, which is battling to maintain its growth, returned in December of last year as a result of the slowing rate of price growth in the United States. This week's positive labor market statistics will help the pound maintain its position at recent highs and establish a new upward trend. I also suggest that you listen carefully to what the Federal Reserve System and Bank of England officials have to say. They will have a dramatic impact on central bank policy. According to the most recent COT report, short non-commercial holdings climbed by 1,537 to 65,463, while long non-commercial positions declined by 7,618 to 36,007, which caused the non-commercial net position's negative value to increase to -29,456 from -20,301 the previous week. It is important to note that the negative delta has risen for three consecutive weeks. This might be a sign that the major players no longer think the pound will increase and are working to unload as much of their positions as they can. When buying the pair at its current highs, exercise caution. Compared to 1.2004, the weekly closing price increased to 1.2182.

Signals from indicators

Moving Averages

The fact that trading occurs around the 30 and 50-day moving averages suggests that the market is lateral.

Note that the author's consideration of the period and costs of moving averages on the hourly chart H1 differs from the standard definition of the traditional daily moving averages on the daily chart D1.

Bands by Bollinger

The indicator's upper limit, which is located at 1.2235, will serve as resistance in the event of growth. The indicator's lower limit, which is located at 1.2170, will serve as support in the event of a downturn.

Description of indicators